Sep

30

When I was laying out the sections for this blog – the regular things I wanted to write about – I decided it was important for a number of reasons to have a regular feature where I would give myself the freedom to sound off on a particular topic. I don’t intend on “Random Musings” to provide any kind of educational benefit. That doesn’t mean I don’t want those of you who read it to get some kind of takeaway. If nothing else, I hope to expose you to some different thoughts.

If you know me at all – even superficially through social media – you’ll likely recognize that I’m an upbeat and positive person. That doesn’t mean that life is always a bed of roses for me. I’ve had a lot of struggles to deal with – many of which you wouldn’t wish on your worst enemy. Some things that have happened to me, I will admit, are because of errors in judgment or poor decision making. For those, I take full personal responsibility. Others were things that happened outside of my control. In these cases, I deal with it and move on as best as I can.

I’m increasingly hearing more and more people moan about the current economic condition. There is so much negativity out there, even if you try and avoid it, it’s very difficult to.

While there are people out there blaming the recession for their own difficult situation – saying that the government, companies, or whoever else – needs to take action – there are people out there who are impacted just as much who aren’t. Those who fall in the latter camp are out there doing their thing. Out there dealing with it. Out there making adjustments needed to survive and thrive.

There’s a lot of hatred right now for the rich. There’s so much energy being wasted on the growing gap between the haves and the have nots. But consider this: in spite of the bad economic situation, there are people becoming millionaires every day. These new millionaires are people who don’t necessarily have anything special about them other than the desire to achieve something.

So maybe you don’t want to be a millionaire. Not everyone does. Maybe you just want to live a comfortable life. Maybe you want to not have to worry about where the money is going to come from to pay the bills. Whatever your personal situation is – you have the power to live a different life than you are right now.

What happened to personal responsibility?

I keep hearing from friends and acquaintances how wrong it is for the financial institutions to suddenly pull back on credit or the other shenanigans. Gasp – for years, many of us have been given access to much more credit than what we should have, we often handled it irresponsibly and somehow we’re absolved from any personal responsibility here?

It’s been a rude wake-up call for many people. As an FYI – I’ve not been an exception to this. I had a nice deck of cards myself. I’ve always been proud to “self-finance” business start-ups on credit. The interest rates and few hassles have made it more beneficial than to pursue normal financing options. It was the easy way – at least at the time. I’ve been paying the price for this the past few years. But as I wrote at the start, when I know my bad decision making resulted in negative consequences, I take responsibility. I don’t try to pass the buck.

I graduated from business school in Finance. For a couple of years, I published a widely read personal financial newsletter. Over the past 20 years since graduating, I’ve been asked by dozens of friends to help them get their finances in order. I’ve also worked with hundreds of small business owners who had very messy financial situations. The biggest issue I would see time and again – and this was when the economy was good – was that people would spend way more than they should be. Easy access to credit made this incredibly easy. The idea of spending money we haven’t yet made is something that became prevalent through the 80’s and 90’s.

What can you do to change things?

Cutting back on expenses seems like an obvious first step to pulling one’s finances in order. But it’s amazing how many people don’t do this. When I was in LA several months ago, I went to dinner with a friend who was lamenting about how business was so tough and that he was very close to losing his home. A good amount of our conversation was him talking about how Obama was failing America as evidenced by the predicament many normal Americans, like him, were finding themselves in. Meanwhile, the meal for the two of us ended up being almost $200 with the tip and he picked up the tab. Note: he chose the restaurant, ordered wine and one of the most expensive dishes on the menu.

The next obvious step is figuring out how to make more money. If you are a salaried worker (whether or not currently employed), consider what kinds of skill updates or additional training could result in higher pay. If you have your own business, consider what changes you can make to increase your income.

But around all of this, the one thing you should be focusing on is changing your attitude. No one held a gun to your head to accumulate debt, to buy the house you live in, to choose the profession you are in. Your current situation is a result of decisions you’ve taken along the way.

When the economy was great, there were still people declaring bankruptcy. There were still people losing their homes. There were still people losing their jobs. Consider the tens of thousands of displaced auto workers who – before the economy went downhill – found themselves losing high paying jobs with great benefits.

People rebuild their lives. They can find stability again or for the first time ever. You can too.

P.S. I mean no disrespect to anyone by my words. I do believe action in certain areas of industry need to be taken – for example, the airline industry.